Rajesh Exports Shares Hit Lower Circuit Again, SEBI Flags ₹15.15 Lakh Crore Revenue Misstatement

Mumbai: Shares of Rajesh Exports fell 5 percent on Friday for the second consecutive trading session after market regulator SEBI took strict action against the company's promoter and CEO, Rajesh Mehta.

The stock hit its lower circuit limit on both major exchanges. On the NSE, shares dropped 4.99 percent to Rs 98.73, while on the BSE they declined 4.97 percent to Rs 99.45.

SEBI Bars Promoter From Trading

The sharp decline came after the Securities and Exchange Board of India (SEBI) issued an interim order against Rajesh Mehta.

The regulator has restrained him from buying, selling or dealing in Rajesh Exports securities until further orders.

SEBI said Mehta had substantial control over the company's daily operations and financial decisions, making him accountable for the issues highlighted during the investigation.

Allegations Of Inflated Revenues

According to SEBI, its preliminary investigation found serious concerns regarding the company's financial reporting.

The regulator alleged that a large portion of the company's revenues reported through subsidiaries may have been overstated.

SEBI Whole Time Member Kamlesh Chandra Varshney stated in the interim order that Rajesh Exports had prima facie misrepresented nearly Rs 15.15 lakh crore in revenues attributed to subsidiaries between FY21 and FY25.

The regulator described the alleged irregularities as highly unusual and serious.

Questions Over Fund Flows

SEBI also raised concerns about the movement of funds through personal accounts and related entities.

According to the regulator, several transactions lacked proper disclosures and supporting documents explaining the purpose and final beneficiaries of the funds.

The investigation also pointed to possible layering and routing of money through connected entities.

Non-Cooperation During Investigation

The regulator said it had repeatedly asked the company to provide financial records and explanations regarding fund usage.

However, SEBI noted that the responses received were unsatisfactory.

The market watchdog also claimed that the company's statutory auditors failed to provide audit working papers despite assurances, indicating possible attempts to withhold important information.

Company Rejects Allegations

Rajesh Exports has denied all allegations made by SEBI.

In a stock exchange filing, the Bengaluru-based company said its revenues were reported correctly and suggested that the issue may have arisen due to a communication gap with the regulator.

The company said it remains confident that once all authenticated documents are reviewed, the regulator will reach the correct conclusion.

Investors will now closely watch the developments as SEBI's investigation progresses and further findings emerge.